eax's Profile

I rarely ever post messages, but I thought I'd give my few tips after recently buying back in November.

The first time homebuyer's class is an absolute must! Not only does it provide 101 information for people who have no clue on about buying a house, but even people who think they think they know everything from watching HGTV can learn something new (e.g. what is a homestead?).

Also in Massachusetts, there is a very helpful loan program called the Soft Second Loan. It allows individuals who fall under a certain income level to qualify for separating one mortgage into 2 separate loans. Why?

If you don't put at least 20% downpayment, you will have to pay private mortgage insurance (PMI). Every lender will tell you that's the dumbest thing to do...it's a cheap way for banks to make money off of ill-prepared borrowers.

If you qualify for the Soft Second Loan, you can split your mortage into 80% and 20% loans. That's means you can avoid paying a PMI since the requirement of 20% downpayment of the total mortgage amount has decreased. Yes, it sounds confusing, but you'll get to avoid paying a PMI even if you can't put the full 20%.

The housing lottery is another option, perhaps not for Cynthia. If you're looking to buy, but not for a year or two, then you can always enter the housing lottery sponsored by many cities in the Greater Boston area. A majority are condo units, but they may also include houses in many redeveloped, up and coming neighborhoods in Boston. Remember the whole NoWa district that's now too overpriced for anyone? They had a lot of units sold through the housing lottery and people get to buy 50% of the price for them and they're just as good as market price units. An additional perk is that these units typically only require a downpayment of no more than 5% if you meet the income requirements and can be further reduced to 3% if you have a first time homebuyer's certificate.